The Capital Markets Authority (CMA) is under scrutiny over billions lost by Kenyans to botched investments.
Garissa town Member of Parliament Aden Duale tore into the markets regulatory oversight role as he asked the National Assembly Finance and National Panning Committee to probe the matter on June 24 2021.
I seek to request a statement from the Chairperson of the Departmental Committee on Finance and National Planning regarding CMA’s failure to regulate the capital markets industry leading to loss of funds and investments of many innocent KenyansDuale said
Duale lamented that the markets regulator is failing in its principal role leading to recent investment failures and the proliferation of unregulated and illegal investment funds.
Further, he cites the recent plight by investors in the Cytonn High Yield Solutions (CYHS) fund by Cytonn Investment.
Duale expressed his amusement at the regulator’s dismissal of the firm as neither a licensed nor approved entity despite raising nearly Ksh.14 billion from the public.
The lost funds
Duale estimates total losses of investments due to ‘negligence’ by the CMA at Ksh.36.8 billion.
This to includes Ksh.2 billion in losses by Imperial bank bondholders after the bank’s collapse in 2006, Ksh.4.8 billion in lost bond investments in the grounded Chase Bank.He added
Duale further cites Ksh.4 billion lost commercial papers in the now defunct retailer Nakumatt even as he cast doubts on the status of the CHYS fund.
The Garissa Township representative wants the CMA to disclose the total number of unregulated capital market products in the country.
This is including the number of invested persons and the role of the regulator in the proliferation of illegal investment funds.
Moreover, Duale wants the effectiveness and efficiency of the CMA established and the total number of firms penalized in the last five years including remedial actions issued by the regulator listed.